Scenes From MDM's Nordic Tech Showcase - 10 Hot Companies From That Cool Region

Yesterday, my company, Manatt Digital Media, hosted a Nordic tech showcase lunch in NYC for 10 top start-ups hand-picked by SLUSH (the major tech/digital media organization about which I have written several times).  Two "hot" tech companies/entrepreneurs from each very cool Nordic country -- Finland, Sweden, Norway, Denmark, and Iceland -- presented their stories to investors and others who may be able to accelerate their growth in the U.S. and globally.  Was an impressive group.  And an impressive event -- one which underscores the tremendous innovation flowing out that "under-the-radar" region (well, under-the-radar perhaps for those in the U.S.).  And one that underscores Manatt Digital Media's commitment to working with the most innovative companies and entrepreneurs in the Nordic region.

Here are some scenes from the event.  See you next at SLUSH in Helsinki, Finland in early November -- what I call a "must attend" tech event.

(Below, to the right, CEO/founder Katariina Rantanen of CosmEthics (from Finland) -- a tech company focused on the beauty space (and identifying toxins and other chemicals in products within it) presents.  Below Katariina, CEO/founder Didrik Steinsson of VR company Breakroom presents his case.  And, below Didrik, CEO/founder Jeanette Dhyre Kvisvik of social media-focused ad-tech company Faceforce presents.  All of these are companies to watch ... closely.)

Manatt Digital Media's May Newsletter Is Out - Evolution of the Digital Economy

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Manatt, Phelps & Phillips, LLP May 13, 2015 Manatt Digital Media – May Newsletter: The Growth and Evolution of the Digital Economy The Rise of the Global Digital Content Market—Esprit de Corps at MIP Digital Fronts MCNs No More, “MPN” Please! (or, What’s in a “P”?) Digital Influencers, Millennials and the New Rules of Engagement 5 Questions with New Form Digital SVP JC Cangilla—Exclusive Q&A MDM Spotlight Profile Social media, livestreaming, feature films, original programming, virtual reality—these are all areas new to the old world of YouTube, and areas into which digital-first media companies and influencers are quickly expanding into as they evolve their business and content models. In this newsletter, we take you behind the scenes of this evolution and introduce some of the players who are driving change. The Rise of the Global Digital Content Market—Esprit de Corps at MIP Digital Fronts By Eunice Shin Warm weather with a gentle breeze on the French Riviera is pretty fantastic. Add to that a wave of excitement in seeing the growth and potential of the global digital market—and there you have an incredible MIP Digital Front event. Read more MCNs No More, “MPN” Please! (or, What’s in a “P”?) By Peter Csathy As many of you know, we write regularly about MCNs (multi-channel networks). But, just in the past few months—reflecting how fast things are moving in this space—the relevant lexicon has changed. Read more Digital Influencers, Millennials and the New Rules of Engagement By Mary Ermitanio Digital influencers—popular personalities on YouTube, Twitter, Vine, Instagram and other social platforms—are increasingly attracting a large share of the consumer attention pie and are transforming the rules of engagement with Millennials. A survey conducted for Variety last year concluded that YouTube stars were more influential than mainstream celebs among U.S. teens. Read more 5 Questions with New Form Digital SVP JC Cangilla—Exclusive Q&A By Peter Csathy New Form Digital, a digital-first studio, was launched with great fanfare almost exactly one year ago by Hollywood legends Ron Howard and Bryan Grazer, who joined forces with Discovery Communications. I recently spent some time with SVP JC Cangilla who runs overall operations, among his many other tasks. Cangilla previously worked as a senior executive in video at Yahoo! and has been a digital dealmaker for years. In a digital video world still dominated by low production values and large doses of serendipity (not necessarily bad traits, by the way), New Form Digital’s approach is very different and, well, a bit more “traditional”—focused on high production values and scripted story-telling—but with digital, mobile and Millennials top of mind. Read more MDM Spotlight Profile MDM’s multi-disciplinary team of business consultants, lawyers and venture capitalists provides a unique perspective in addressing the challenges and opportunities our clients face. Eunice Shin leads MDM’s consulting team and advises media, technology and emerging growth companies on business strategy, organizational priorities and business development.  Read more Contact Us:  T. Hale Boggs Chairman Email 310.312.4269 Peter Csathy CEO Email 310.231.5445 Eunice Shin Director  Email 310.231.5494 Mary Ermitanio Senior Analyst Email 310.312.4170 Practice Area Links Manatt Digital Media Team

The Rise of the Global Digital Content Market (The View from MIP) -- Guest Post by Eunice Shin

(This is the second guest post by Eunice Shin, who heads up the business consulting side of Manatt Digital Media and just returned from MIP.  Take particular notice of the quote at the very end of her post.)

Warm weather with a gentle breeze on the French Riviera is pretty fantastic.  Add to that a wave of excitement seeing the growth and potential of the global digital market – and there you have an incredible MIP Digital Front event.

Clearly to date, the US has been a leading force in the world of digital media.   Certain parts of the world have been slower to the take (hint: where millennials don’t make up the majority of the population), but there is no doubt that digital media buying is now a global opportunity.    

Here are some of the big trends we saw at MIP TV 2015:

·      MCNs have grown into MULTI-PLATFORM MEDIA AND ENTERTAINMENT companies, developing content in films, music and scripted TV.  Buzzfeed, Vice, CDS, and AwesomnessTV are in the film business as well.  Many of the leaders in this space are growing into their own skin and have a better sense of identity.  It’s exciting to see differentiation of focus starting to take place among these digital-first players – Stylehaul and Collective Digital Studios with brands; VICE with millennial-only media programming channels; and  New Form Digital with scripted, original content. 

·      Digital content, short and long form, are getting licensing deals with international streaming services and partners

o   Maker Studios will have a channel with over 2,000 videos on CanalPlus’ streaming service, CanalPlay

o   AwesomenessTV will provide over 200 hours of original content for Verizon mobile platform

o   Numerous deals initiated at MIP and still underway will soon be announced

·      Social media is a DISTRIBUTION PLATFORM.  Facebook and Snapchat were mentioned in every single presentation and meeting I attended.  Without a doubt, better effectively leveraging social platforms will be key for digital content companies in 2015.

·      Live streaming is on the rise – creating more opportunities around events, sports, music and gaming

o   Dailymotion served 150 million hours of live streaming in 2014

o   Vice and LiveNation announced at MIP a new partnership to deliver live music videos – applying the cinematic nature of music videos to a live performance and streaming it live from a variety of major music concerts

·      When it comes to digital, SCALE IS STILL CRAZY IMPRESSIVE.

o   YouTube has 300 hours of content uploaded every minute

o   At Machinima, their audience consumes 3.8 billion videos per month.  And in one month, Machinima produces more than 10 times the annual output of the largest fully-distributed cable network in the US.

o   The most social film of 2014 was AwesomenessTV’s Expelled, beyond Guardians of the Galaxy, The Maze Runner, and Fault In Our Stars.

I leave you with the best quote of the week:

“Traditional TV viewing among teens and tweens is dead.  Not dying, dead.” -Brian Robbins, Founder/CEO of AwesomenessTV

Tastemade - Scenes From the MCN's Exclusive Event

Last night, leading food & travel MCN Tastemade (headquartered just down the street from us here at Manatt Digital Media in Santa Monica, CA) held an exclusive invite-only event announcing its new partnership with Apple TV (a big coup which gives the MCN great visibility and distribution).  As expected, great food.  Great drink.  And video creators all around.  Here are some images of the event.  (Below, in order of appearance top to bottom, (i) deconstructing steak with a blow-torch ... yes, a blow-torch), (ii) the overall scene in the Tastemade studios, and (iii) pouring home-made Old Fashions.

LA Mayor Garcetti at SXSW - VIDEO - "If You Really Want to Know What Tech Looks Like, Come to LA!"

Proud to feature LA Mayor Eric Garcetti as our special guest at SXSW yesterday -- where Manatt Digital Media hosted a special private digital media/tech event with boutique investment bank/VC firm Siemer/Wavemaker.  He is one smart and charismatic guy -- and a true champion of LA's fast-growing and impactful tech scene.  Watch the video -- and here is a choice "cut" from his impromptu speech:

"This morning I was asked by a reporter on the way here, 'so what do you do to become the next Silicon Valley?'  And, I said, we don't want to be the next Silicon Valley.  We love Silicon Valley, but we're LA .... We disrupt space.  We disrupt fashion.  We disrupt content.  We disrupt so many things, that I tell people, 'if you really want to know what tech looks like, come to LA.'  And, that's before I start talking about our superior weather, our superior diverse people, our amazing geography ...."

Well said, Mr. Mayor, well said.  A great meetup it was ....

VR 101: Lesson 1 -- DISTRIBUTION (& Its Challenges) -- #1 In a Series

[The following is the first in a series of posts about the burgeoning world of Virtual Reality (VR) by guest blogger Omar Noureldin of Manatt Digital Media.  He previously wrote a VR-focused "Cheat Sheet" overview of the VR space (and key players in it).]

To understand what the virtual reality (VR) distribution pipeline will look like, a stroll down memory lane vis-à-vis online video will be instructive. It took time for the online video ecosystem to develop into what it is today -- and that was largely because of disjointed and competing distribution platforms in its early years. Anyone with a smartphone, tablet or computer knows that YouTube -- despite new "real" significant challengers like Facebook -- continues to dominate this space with over 1 billion users.  But, this took time (and an acquisition by Google, which merged Google’s less than stellar Google Video platform). Still, the vast majority of YouTube’s content is user-generated.

Then there are the premium content platforms like Netflix, Hulu and Amazon, all of which have turned the prime-time TV model on its head. First, by reusing content, and now by creating original content. Vimeo is a growing player in this space (among numerous others) and has laid its stake in the ground by focusing on high-quality, high-resolution content and on content creators -- and it is now dabbling in VOD and SVOD models.

So, what does this mean for VR? What is the opportunity?

Well, the opportunity is for new digital distribution platforms to emerge that focus solely on VR content. The reason some believe nnovation will happen with these new distribution platforms, rather than from giants like YouTube, is because VR distribution will require advancements in packaging and transferring vast amounts of data across existing networks that are not necessarily ready to handle that kind of traffic.

Herein lies a massive challenge. High-quality VR content is not mobile friend ... at least not yet ... for a couple of fundamental reasons. First, current bandwidth capacities limit the amount of data that can be transferred, and mobile devices are limited in their storage capabilities. Second, mobile processors literally overheat and melt when trying to play high-quality VR content that is more than five minutes long.

Today, the big online video distributors are all about mobile, which creates a disconnect in strategy and focus if they want to move full force into VR. Moreover, YouTube is still trying to figure out how to be profitable in the traditional online video space, so many pundits believe that makes little sense for them to spend a lot of time, money and effort to develop new distribution channels for VR (especially when YouTube is now focused on developing its own premium original content, as original premium VR content is a ways away).

Instead, many predict a proliferation of VR-focused distribution platforms and companies experimenting with different ways to deliver the content—Vrideo is one of them. The company recently hosted a VR Meetup and panel discussion on this very topic in Santa Monica. As discussed earlier, there will need to be technological innovation at every level of distribution—packing, transfer, storage and processing.

Do not get me wrong, there is already talk of the big media and online video companies (Google, Amazon, Netflix, Disney, etc.) and telecoms (AT&T, Verizon, etc.) eventually going to war to acquire these smaller VR distribution companies.  But, it is likely to be an M&A war, not a technological advancement war.  Google has already invested a whopping $500 million into MagicLeap, which is developing VR technology that merges the real and virtual worlds -- so-called augmented reality.

Massive sums of money are being poured into VR right now -- and distribution is one of the keys to unlocking its potential.

[NEXT IN OMAR'S CONTINUING VR SERIES WILL BE LESSON 2 -- SOCIAL, followed by Lesson 3 -- Hardware, Lesson 4 -- Advertising, and Lesson 5 -- VR Rights.  Stay tuned ...].

Streaming TV & Movies OUTSIDE the U.S. -- Your Travel Guide -- Guest Post

[The following is a guest post by Rory Donald, who is writing as part of the Manatt Digital Media team.  Rory is smart and passionate about the ever-shifting sands of the media and entertainment business.  He writes based on his personal real-world experiences.]

Until fairly recently, traveling abroad and keeping up with my favorite TV shows while away were mutually exclusive.  In my trip last month to India, I discovered that it’s getting easier and easier to stream U.S. content in foreign countries.  However, availability is inconsistent.  In this post, I explore two things about the state of international expansion of streaming video internationally.  First, I discuss key impediments to streaming video outside the U.S.  Second, I identify where the major U.S. streaming video players (namely Netflix, Amazon Prime, HBO Go, and Hulu) are available internationally (and what their plans are for expansion).  To be clear, I discuss only legitimate access to U.S. content in this post (many people abroad find ways to get U.S. content illegally via a hack that looks like they are streaming content from a U.S. IP address.

IMPEDIMENTS TO INTERNATIONAL EXPANSION

International expansion is a major revenue opportunity for providers of streaming video on demand.  The demand for video-on-demand abroad is significant.  You can see it in the year over year growth in Netflix subscribers internationally.  Netflix’s most recent annual report  indicates that international membership grew 67% in 2014, and 79% in 2013.  

So what are the major hurdles to tapping new subscribers abroad?  In my hotel room in New Delhi, for example, I was wondering, “why can’t they just flip a switch make my show available in this country?”

A recent Variety article identifies the following major hurdles:

1.  Broadband limitations in individual markets.  While 78% of households in developed countries have Internet access, only 31% of households in developing countries are projected to be connected by the end of 2014 (according to the International Telecommunication Union).

2.  Different devices in different countries.  In many countries, mobile phones are the primary access device, and wireless services often include data consumption limits that make streaming video not feasible.

3.  Varying local regulations.  In China, for example, Netflix will need to get a specific state license to offer its service.  In addition, many countries have specific regulations about privacy and how companies bill customers. 

4.  Payment systems in each country are different.  For example, in some countries, customers pay for streaming content with prepaid cards.

5.  Variations in copyright laws.  For example, in France -- where Netflix launched last fall -- a law requires that movies cannot be made available for streaming video on demand until 36 months after theatrical release.

6.  Different cultural content preferences in different countries.  This speaks for itself ... in every language.

CURRENT STATE OF AFFAIRS

Below is a summary of my research regarding the international availability of the major U.S. OTT streaming services.  Note that I do not address downloadable video via iTunes or Amazon, which is much more widely available, but has significant downside problems of their own, including (i) the time delay before the content becomes downloadable (time delays are deadly when your friends are gushing in live tweet about the Red Wedding in Game of Thrones), and (ii) sheer unavailability of certain premium content (e.g., HBO shows, which are never made available for download).

1.  NETFLIX.  According to Variety, Netflix is already the world’s biggest OTT subscription service, operating in 50 countries in Canada, Mexico, Latin America and Europe.  In January, Netflix announced ambitious plans to grow to 200 countries within the next two years.  In March 2015, Netflix expects to launch in Australia and New Zealand.  Netflix is taking a longer and more cautious path to China.   

2.  HBO GO.  Since HBO is a subsidiary of Time Warner, data on HBO Go’s availability outside the U.S. is difficult to find.  For example, Time Warner’s most recent annual report provides data on the availability of HBO, but no separate data for HBO Go.  One site, however -- hbowatch.com -- attempts to keep track of the availability of HBO Go internationally.   From this site, it appears that HBO Go, or HBO Go’s content provided via a local operator pursuant to a licensing agreement, is available in the U.K., Canada, and some countries in Latin America, Scandinavia, and Eastern Europe.

3.  AMAZON PRIME INSTANT VIDEO.  According to a January article syndicated from the Associated Press, Amazon Prime Instant Video is available to Prime members in the U.K., Germany, and Austria.  Non-Prime members can purchase movies and TV shows on an a-la-carte basis in those countries and in Japan.

4.  HULU.  According Hulu's website, Hulu and Hulu Plus are not available outside of the U.S., other than in Japan.  The site further states: "While one of our long-term goals is to make Hulu's growing content lineup available worldwide, we don't have a timetable or any news regarding expansion beyond Hulu Japan at this time.”

Early data -- particularly from Netflix -- demonstrates the voracious appetite for U.S. television content outside the U.S.  The global opportunity for U.S. travelers like me, U.S. expats, and U.S. content enthusiasts alike is right here ... right now.

Time to remove those impediments.

Tear down those walls!  (Now to deal with my international data roaming bill.)