Netflix’s Ted Sarandos -- Distribution Windows Will Shut (& More Responses to My Direct Questions)

Yesterday morning, I attended a small event hosted by Bloomberg and featuring Netflix’s Chief Content Officer Ted Sarandos (who has been with Netflix since 2000), who was surprisingly forthright about the company’s thoughts about disruption and new business models in the over-the-top (OTT) premium video distribution world.  Here are some choice sound-bites from his interview (including from my after-the-event direct conversation with him):

-- regarding distribution windows, he started by saying he is not calling for "day-and-date" distribution (which means concurrent same-day motion picture release in theaters and online); BUT, after the event, I asked him some direct questions -- most particularly, whether he felt that “day-and-date” was inevitable.  In response, he indicated that he does expect these windows to essentially shut and feels strongly that that reality is best for all players in the video eco-system.  But, interestingly, he does not feel that it may make too much of a difference to consumers if the motion picture is released online precisely on the same date as theatrical release (in his words, “not sure if consumers will care if it is one week later ...”);

-- I asked him what that reality means for theatrical owners and their business model.  He indicated that theater owners will be fine if they focus on their unique customer experience.  As an example, he pointed out that a full 3-D “Gravity” experience cannot be achieved at home;

-- when asked how Netflix uses -- and will use -- its massive trove of data, he said “I’m not a believer of reverse-engineering content”; he said efforts to do so would “lead to a Frankenstein monster” of content; so, “don’t use data to guide good story-telling”, rather use it to determine how many fans a director like David Fincher has;

-- speaking of Fincher, Sarandos emphasized that NO one outside the company has access to its data to understand how well their motion pictures and shows are performing; that confidentiality is bound in its contracts;

-- he underscored that live sports are “not a priority”;

-- when asked about Amazon’s new strategy of releasing 3 episodes of its shows at one time, in clumps (as opposed to Netflix releasing all of them at once), Sarandos indicated that he/Netflix believe in more choice for consumers, not less; “why try to out-guess consumers” about what they want?

-- he also emphasized that Netflix’s economics are very different than the major television networks, because Netflix is not saddled by the scarcity of time-slots and making those slots and shows work; Netflix can have a very successful business with many “singles and doubles”, whereas all network shows must be major hits to succeed.

5 Questions with MovieLaLa’s Founder & CEO, Dana Loberg -- My Exclusive Q&A

Continuing my new series of exclusive Q&As with people and companies that you should know in the wonderful world of digital media, meet Dana Loberg, Founder & CEO of MovieLaLa, a company based in the Bay Area (but very much steeped in the milieu of the studios in LA).  Dana is a powerhouse -- talented, creative (more on that below), driven, tireless, tenacious, and passionate about her company and the overall market opportunity -- all qualities I love in a start-up CEO.  Movie studios of all stripes should listen to what her company can do for them.  And, consumers will value the end results.  That’s why -- despite the fact that she is a Yale-ee -- we here at Manatt Digital Media Ventures (and several media and digital media luminaries) invested in MovieLaLa.  Can’t reveal those other investors yet, but you will be impressed when Dana does.  With that intro, here we go:

(1)   What is the reason your company exists (and what problem(s) are you looking to solve)?

MovieLaLa wants to deliver a new fresh experience for movie fans looking to find movies to see and friends to see them with. Up until now, what’s been missing is that critical social layer around movies and movie-going, allowing people to discover movies through friends and have a more personalized, curated experience online.

More importantly, studios looking to market their movies can have direct access to people who are interested in receiving their content. Not only are there better ways to communicate with their audience, MovieLala’s analytics allows studios to optimize their marketing dollars well before a movie opens theatrically – giving studios access to powerful data that helps them reach the right audience in more effective ways than more traditional methods in place today.

(2) How are you different from your competitors?

There are several players in this space: Flixster, Rotten Tomatoes, IMDB, etc movie sites. From a user experience perspective, they’re all pretty similar. Many of them have spent more time building out their advertising models than innovating their front-end design. These websites rely heavily on the same business model: banner ads and advertising. When we launch in the New Year, we hope that people will see our iPad app and say “Wow. This is something I’ve never seen before.”

MovieLaLa has some new technologies and tools for marketing and changing awareness to definite interest among movie fans. Plus, we have a strong data play that is unique from our competitors.

There’s also a huge opportunity in the iPad and mobile space when it comes to the movie-going experience that we are focused to capitalize on. By launching on iPad and mobile,  we can invent new ways to make the movie going experience easy and fun.

(3) Why will you succeed (and what is your single most important ingredient for success)?

We will succeed because of our team: our backgrounds, experience and passion for this space and global view of business. For MovieLaLa, our single most important ingredient has been the relationships we’ve built with the studios since day 1.

(4) What makes you unique (and what do you enjoy most outside of building your business)?

I’m part tech, part entertainment -- half I Robot, half Jennifer Lawrence. I’m a native to LA- raised in the entertainment capital of the world, Westwood Village. I’m currently living in the heart of Silicon Valley, with a few years experience in startup tech in the Bay Area. Now with MovieLaLa, I’m bridging the divided gap between the two forces: tech and entertainment.

Oh, and I paint on the side in my spare time. Medium: charcoal/pastel on newspaper and book. (http://danaloberg.com)

(5) What digital media trend is most interesting to you (and what is the least)?

Real time data and analytics are interesting to me. The “Data Scientist” title is a dream of mine ;) Least interesting to me is YouTube, personally. I’d rather not give specifics as they’re reading my sentences….

And Then Life Happens ... Aging Parents & The Case for Online Help

Am now facing a reminder of how precious it all is.

Many of us have aging vulnerable parents.  I do.  I live in San Diego.  My mother lives in Minneapolis.  This past week, she was hospitalized.  Unexpectedly of course.  A serious issue, yes.  How serious?   Not exactly sure, but she was discharged after a couple nights and is now in a rehab facility for some days (how many?) with the expectation that she will then return to her own place.  Fortunately, my brother is a doctor so, although he too lives in Southern California, we have a deeper understanding than most of her physical condition.  But at this point in my mom’s life, friends are scarce -- so, although my sister thankfully lives in Minneapolis to check in with her, my mother’s emotional condition (and, in particular, basic feelings of safety) are now in play.  For the first time.  The current “situation” likely has changed her perspective in this regard permanently.  So, my siblings and I are in full-on scramble mode to figure out “next steps” (“next steps” that we have loosely discussed for years, but never locked down as a plan).  Is my mother living at her long-time home now an option?  I don’t think so.

As part of all of this, I am soon flying back to my home town for several days to be with my mother, support her, and assess her overall state-of-mind and situation.  In the meantime, my siblings and I continue to feverishly research various issues, including potential alternative living arrangements in SoCal, as best we can.

Digital media, for the most part, is not there to help us (or others like us) in any organized fashion.  As surprising as it may sound, there are no complete online services that consolidate those issues that we all have faced -- or will face -- with aging parents or other dire medical situations that require consideration of long-term care.  Instead, it is all a confusing disjointed patchwork.  I know this not only from my own experience, but also by having also spoken with others who too have faced these “aging parent” issues and are sophisticated about such things.  THAT is a MASSIVE need for all of us -- and a MASSIVE business opportunity for “double bottom line-driven entrepreneurs -- given the shifting demographics of a massively growing silver population.  So far, “A Place for Mom” is the most complete site I have seen, but it is incomplete -- it lacks many of the topics and resources that are relevant in these situations.  It also forces users like me to frequently interact with faceless third-party operators, rather than providing me open information and enabling me to parse through it effectively and efficiently on my own (which I want to do in this situation).

Of course, and at the risk of stating the obvious, my mother’s medical condition (and emotional state) mean that everything else is de-prioritized.  Everything.  Family first.  And, just like working at a start-up, a relentless focus and tenacity are required in situations like this.  Business meetings can wait -- or can be covered by others (that is what a team does, after all).  “Just do it.”  Find a way.  Stay on it.  Be a person of action (not only a person who ruminates).  Hours of sleep can be sacrificed for the sake of researching and figuring it all out -- and trick-or-treating with the kids -- to keep the basic “wheels on the bus” for all other things.  That’s what coffee is for.

These are things most of us already know, of course.

But, they, again, are fresh in my mind.  It is a time simply to make it happen -- “it” being the best possible alternative for my mother.

All other things can wait.  But, entrepreneurs, please come and help.  I -- and all of us out there (at one time or another) -- are waiting for you.

5 Questions with LittleCast’s Founder & CEO Amra Tareen -- My Exclusive Q&A

Today, I start my new column -- “5 Questions With ....” -- and in it, I will ask the same five questions of founders, CEOs and other top execs from digital media and technology companies that I have come to know and find to be of interest (and, as a result, hopefully interesting to you).  Each of these companies pass my “MUST CHECK OUT” test based on my own personal early diligence.  Importantly, this Q&A is exclusive to my blog -- this is a all fresh content.  So, my hope is that you will gain new insights by reading them.  Further, I want to keep the insights “pure” -- meaning that the answers come directly from the executive (and have not been altered in any substantive way).

For my inaugural column, I have chosen founder and CEO Amra Tareen of LittleCast, a cool new company that gives video producers (think comedians, physical fitness gurus, etc.) a new direct distribution path to monetize their own content online and on their own terms.  Amra is great -- passionate about LittleCast’s mission (an absolute “must” for me with any founder/CEO).  And, my own company, Manatt Digital Media Ventures, believes in her and her company’s mission -- so much so that we recently invested.

So, on with the questions:

(1) What is the reason your company exists (and what problem(s) are you looking to solve)?

We're here to help content producers sell their works where their audience already is: on facebook and their mobile phones. We take content marketing to the next level and encourage producers to make money from their content.  We don't agree with the notion that producers have to spend money creating content to engage their audience.  The content does that.  We're here to help them make a living from their passions. 

(2) How are you different from your competitors?

My competitors believe in having established brands and destination sites. LittleCast believes in the publisher’s or producer's brand and not diluting that.  You'll never see us ask a producer to drive their traffic to someone else's site.  We give producers the tools to make the most of what they have.  Our commerce video player can be embedded on their properties like their facebook page, website or blog.  They don't have to tackle additional burdens of promoting  content and pushing their audience to someone else's property.  Another differentiator is our personalization and discovery abilities.  These are difficult propositions for video, YouTube hasn't figured this out yet.  But, people you follow and like probably know what you like, so LittleCast makes it easy to discover and participate in the conversations around content your network is engaging with at any time. 

(3) Why will you succeed (and what is your single most important ingredient for success)?

In a word?  Experience.  We have started companies before!  We know the market is going mobile, embracing paid content, integrating social with real peer-to-peer commerce and watching more video than ever before on every type of device.  Our job is to execute well. We have to execute and hang in there until the product and solution becomes obvious to everyone.  We can't predict market timing (although we believe we're in the right place at the right time) but we have the stamina to make LittleCast a success. First-time entrepreneurs fail to recognize how much of a marathon a start up really is--this is not a sprint. We've done this before and know what it takes to succeed!

(4) What makes you unique (and what do you enjoy most outside of building your business)?

I'm a product of my upbringing, which was very global.  That, and my long-term perspective, empathy and a deep longing to change the world around me!  I also love the sound of the ocean and simple things in life: my family and friends.  These keep me grounded and very focused. 

(5) What digital media trend is most interesting to you (and what is the least)?

Without a doubt it's paid content. I believe people should make money from their efforts regardless of which industry they are from: journalism or other types of media.  If you put effort into creating content, you need to be paid for it.  Period. You deserve to make a living from you creative pursuits.

“Viral Videos Are Almost a Thing of the Past”, Says MCN Big Frame’s Sarah Penna

Late last week, I attended a high-powered digital media conference hosted by leading digital media/tech venture capital firm DFJ Frontier and leading talent agency UTA.  It was one of those rare (very) afternoon of panel discussions that actually “mattered” -- meaningful, insightful, educational.  One particular panel focused on MCNs (multi-channel networks), social media, and metrics (measurement of social media success and influence).  It was real-world, not Ivory Tower.  No press.  Just execs and entrepreneurs.

As one example, I found what leading MCN Big Frame’s Founder/Chief Creative Officer Sarah Penna (photo on the right) had to say.  Since an informal code of privacy cloaked the event, I asked Penna if she would be comfortable with me writing about what she said.  She was.  So here it is.  In particular, and most provocatively (at least to me, who considers myself fairly well-versed in all things video), she pronounced that “viral videos are almost a thing of the past.”  That really struck me.  And, why is that the case in her view? Because YouTube -- the ultimate universal television “channel” -- no longer features videos on its home page (and hasn’t for quite some time), which leads to a massive 1-2 punch problem that she calls “scarcity” and “discoverability.”  Both flow from the viewer’s challenge to find content that matters to them -- that is relevant to them.  YouTube’s previous home page incarnation curated videos -- guiding us to those videos deemed worthy to become viral phenomenon.  They were proclaimed to be as such.  And, so they became such.  Not anymore.

I asked her how her statement “jives” in the face of the current “must see” Russell Brand video and political discussion that has swept the Internet with over 6.5 million views as I write this on a Sunday morning 4 days after it was posted).  She pointed out that that happened outside the YouTube eco-system.  We need to find what “moves” us video-wise on our own -- with more effort -- and actively drive those videos to become global phenomena via our social networks and blogs.  (By the way, no matter what your politics are, you must respect Russell Brand’s passion, reasoning and eloquence in that video, the latter two of which certainly came as a surprise to me).

Penna -- who is both impressive and down-to-earth, by the way -- also answered questions about how the YouTube creative video development process is similar to, or differs from, traditional motion picture and television development.  "YouTube is more of a cult of personality than content development,” she concluded.  YouTube-ian content development is simply worlds away from motion picture and television development.  She expanded on this theme by indicating that YouTube content works when it "is a conversation” -- "and the power of that conversation comes from creating influence.”

Penna also underscored that sheer numbers are not enough.  While having millions of subscribers certainly doesn’t hurt, she emphasized that “t

here's a big difference between scale without influence and niche with influence. The latter is much more valuable.”

One more thing, Big Frame -- and other MCNs -- must justify their existences of course.  So does the roster of talent on Big Frame and others.  In other words, they must make money.  And, that means advertising.  So, how does a YouTube star stay “authentic” in the eyes of his/her audience amidst the reality of big brands infiltrating their intimate space?  Penna explained that she tells her clients to be “up front about it.”  “Tell your audience that this is your living.”

No reason to be subtle about this reality.  After all, subtlety is NOT exactly the central characteristic of YouTube videos.

My Latest HuffPo(st) -- "Netflix - 5 Reasons Cable Companies Should Just Say ‘Yes’!"

Yesterday, The Huffington Post published my latest guest post, titled “Netflix - 5 Reasons Cable Companies Should Just Say ‘Yes’!"

In it, I lay out the case for cable and satellite companies not only to bundle Netflix as part of their overall programming packages (as a defensive measure), but also to use Netflix to their advantage (as an offensive measure).

Netflix - 5 Reasons Cable Companies Should Just Say “Yes"

Netflix is reportedly in discussions with major cable companies to carry the service natively via their set-top boxes.  This follows years of acrimony between the two camps -- Netflix’s open OTT service v. cable company IPTV solutions limited to their physical footprints.

Much has been written about this turn-of-events (including a couple earlier posts myself).  In fact, I was just quoted extensively this past week about the subject in the San Francisco Chronicle.

But, here are 5 reasons why it is a no-brainer for the major cable and satellite companies to carry Netflix as another “channel” available to their subscribers:

(1) Netflix Already Is Everywhere -- Netflix customers already can (and do) access their accounts everywhere and via multiple other access points, including their DVRs, DVD players, Xbox’s, Apple TVs, and others of that ilk.  That is the reality facing cable/satellite providers.  So, why pretend it isn’t there?  In the words of Cablevision’s CEO James Dolan, “if you don’t ride the wave," you “get eaten by the wave."  Why send your customers somewhere else to get what they want?

(2) Compelling User Experience -- Piggybacking on the point above, bringing Netflix into the cable/satellite package can only enhance the customer’s customer experience.  While it ain’t that hard for Netflix subscribers to access their accounts via other means, it certainly ain’t seamless.  It is another step -- and a step that is inconvenient for Netflix subscribers like me (I know I still fumble with multiple remotes to switch from my DirecTV to Netflix at home).  Cable/satellite companies likely also will (or should) integrate Netflix into their customer billing, so that customers don’t receive a separate Netflix monthly bill.  That too increases the customer experience (via seamless, unified billing)  Customer experience/satisfaction -- and cable NPS (net promoter scores) -- can only increase with the addition of this increasingly “must have” Netflix channel.  With one remote, cable/satellite subscribers can select Netflix.  That kind of convenience and ease-of-use matters.

(3) One-Stop Shop for All Compelling Content -- Netflix’s original programming strategy is here to stay (House of Cards, Orange Is the New Black, Arrested Development are just the beginning).  These shows are winning major entertainment kudos and, more importantly, attracting large audiences.  Viewers increasingly want their Netflix.  That is the reality.  So, why not give cable company subscribers another reason to stay (and not cut the cord)?  After all, Netflix doesn’t have NFL Football and ESPN (you, cable/satellite, do!).  So, tie it all together in one beautiful package for your customers!  Don’t think of Netflix as being competitive.  Think of Netflix as being additive.  Think of Netflix as being just another channel -- but, an increasingly critical one.  Think of Netflix as being a marketing “win” and competitive advantage for you!  Only you can offer all of the programming that “matters” in one easy-to-use package and seamless customer experience!  (And, maybe Netflix will even pay YOU for the privilege of being offered on your platform, since you are expanding its subscription footprint!).

(4) Netflix Will Bring More Attention to Your Own Original Programming -- Since more cable/satellite companies will stay (and not cut the cord) with the addition of Netflix as another channel, that means that more viewers will watch original programming by the cable/satellite companies themselves (like “Rogue” on DirecTV).  The more viewers watching your content, the more valuable it is.  And, just like Netflix original programming, more subscribers will stay to watch it (so long as it is compelling).  And, don’t forget, you may be able to monetize that original programming in other ways by licensing to other territories -- and, how about this, back to Netflix itself (that’s right, if the shows are good, Netflix will want them and pay for them!).

(5) Another Important Reason for Customers to Opt for Faster Broadband -- Consumers always want better video quality.  That thirst never ends.  And, guess who offers the pipes to enable that quality?  That’s right cable companies, you do!  So, by bundling Netflix into your overall package of services, you are giving your customers yet another reason to upgrade to premium broadband packages.  And, guess what?  That’s right, your margins are significantly higher in the broadband game than they are in the content packaging game (due to the high licensing costs associated with offering that content).  So, perhaps your so-called “dumb pipes” aren’t so dumb after all.  Smart.  Very smart.

Voila!  Q.E.D.  Res Ipsa Loquitur ... just look those up ...