[DRAFT]
Audiovisual content industries (ACI from here forward) are made up of a range of economic actors that produce a variety of media products for a number of markets. These actors, from individuals to companies to large clusters of companies working together, create content with target audiences in as diverse socioeconomic situations as the unprivileged single mothers watching TV in urban neighborhoods – to wealthy businessmen in first class intercontinental flights consuming movies on iTunes on the newest iPads; in geographies as disperse as China, Brazil and Estonia; in formats intended to be seen in one sitting or in a series of viewings throughout 20 years in soap operas that cross generational chasms; with variation in length from a few seconds to multiple hours; with revenue steams as different as Google Adwords, streaming licenses and downloads; with budgets from as low as €0 for a webcam-shot YouTube series on how to apply makeup to €500M in James Cameron’s transmedia IP Avatar that creates a fictional universe. My point is, the ACI are diverse in every sense of the word and their ability to make use of social network markets (SNM from here on) is – and will be – proportionately diverse.
Large portions of content is now – for free or for money – available online. Whether legally or illegally, content has found new markets in social networks that have previously remained inaccessible or have not been though of as markets at all. In the case of piracy, these are markets where there’s a buyer but no one is selling; and this will be a crucial point that emerges from my argument – the seller needs to be present where the consumer is to engage the buyer in a transaction; while this may seem obvious, in the current online landscape this is often not the case. As Lessig puts it “YouTube is a picture of unmet demand” (Remix: Making Art and Commerce Thrive in the Hybrid Economy, 2009). In the following I will look at the opportunities of SNMs concentrating on Content Discovery by audiences and Collaboration between producers to capture a new markets; I will also look at the Challenges of SNMs, focusing on Decision-Fatigue.
Opportunities
Entrepreneurs have built online platforms that connect people together as if they were living in the same tiny village: online hubs where people see and interact with each other every day – and throughout the day. In the largest network of such, close to 900M people can reach each other through multimedia messages (text, video, photos) both in real time and with delayed messages. A person can communicate with 1/7 of the world population (privacy settings permitting) in a network that is growing rapidly by the week. From the point of view of ACIs, such previously unprecedented access creates opportunities to disintermediate parts of the content production and distribution value chain that have been previously deemed crucial for a successful product.
Hartley compares SNMs to airport book markets – places where mere expertise in written form is not enough to sell the book to a business traveler. Grabbing his or her attention in the first place – through publicity and fame – is crucial to making the sale; and thus to the dispersion of the valuable knowledge contained in the book. With a focus on educating the public, Hartley highlights the “importance of signaling in the propagation of public thought”. But the same idea applies to content that is frivolous or “mere” entertainment. “If you want to get an idea across, get attention” (Hartley, 2010).
For brevity, I will refer to selling movies (and any other type of media products) through SNMs as Social Commerce. This name has become popular with entrepreneurs and venture capitalists in Silicon Valley in the forefront of building these new social platforms and engineering ways to engage audiences. Social commerce has the promise to become at a buzzword – and perhaps a key trend – in 2012.
1 Collaboration
Pre-production fundraising ands soliciting investors.
Movies are more entertainment than public thought.
There is a key trend towards consumers creating more content. Consumers are more active to express their own unique perspective and there’s expectation to be able to interact with media. Interaction makes a product feel more tangible; and something that feels like you can to touch it feels trustworthy. Also creation adds meaning to one’s life. As Lessig shows with Japanese schoolgirls with day jobs have active amateur lives. “[They] see themselves as producers and participants in a culture and not just recipients of it.” (Lessig, 2009)
ch2 Content Discovery
For a content owner the geography of the consumer does not matter. Whether a customer is 10km or 10000km away. If there’s someone in Australia interested in seeing an Estonian show, how can content industries take their silos of content and connect people across the planet with content in a fashion that is relevant (individual and personalized) to such a degree that they would pay for it?
Social networks are building out interest graphs that One can target their message to groups of people based on shared tastes and interests. While the technologies for assessing a person’s taste are only in the beginning, they are improving with better understanding of human nature.
What’s the difference between a YouTube video and a Blockbuster movie? The Aesthetic of a Product.
Content business models rely on windowing that focus on a specific channel for a limited window of time; with each window accompanied by a marketing campaign (sometimes paid for by a 3rd party, such as the cinema chain where the theatrical release happens). The overall budget for marketing across windows may well be larger than the production budget of the media product itself. Windowing focuses marketing efforts on a single channel in succession, from the channel with the highest perceived value – the cinema release – to DVDs, pay TV, free TV, online streaming and downloads. Disney will even release an old movie across generational windows every 10-15 years to attract new young audiences (Anderson, 2004).
Curation is the act of selecting a number of products from a large product catalog and attaching the social proof of that value of the chooser – the tastemaker. If the tastemaker is influential, this can affect the choice of a consumer who identifies with the curator. The curator need not necessarily be a national or international celebrity but he is a celebrity – someone with an esteemed taste – for his community, his group of followers.
Because the market is global, in the long tail, marketers can “aggregate disperse audiences” (Anderson, 2004) that are similar in their movie-taste.
The question of
Curation. Finding content. Human-powered and algorithmic.
Marketing is used to create demand for product with mass-market appeal.
“By divorcing bookselling from geography, these networks create a liquid market at low volume” (Anderson, 2004).
“hits still matter in attracting the customers in the first place” (Anderson, 2004).
“businesses can then guide consumers further afield by following the contours of their likes and dislikes, easing their exploration of the unknown” (Anderson, 2004).
“Access is the mantra of the YouTube generation. Not necessarily free access. Access.” (Lessig, 2009).
“Free access is a means to gather extremely valuable data about the viewer. That data can translate into much more effective advertising techniques” (Lessig, 2009).
People make important decisions based on aesthetics. This looks like fun, this looks boring, this looks x. It is important to style content for the target audience.
Content producers can make use of a number of ways of signaling that are fundamental to human psychology. These signals include Artificial Scarcity (exclusivity in time, space, group), Social Proof (endorsement by a famous person, endorsement by a large number of people = movement). An example of time scarcity is Limited-time streaming. Prescreen is a Groupon for filmmakers, where a time limit is set for the purchase of a movie. It remains to be seen whether this model works, as the company has not released data.
How to stand out?
Psychology of the campfire. Meet people who like the same thing. While Lego is a physical product, a cultural good such as a movie can work the same way. Media become the campfire around which people gather to enjoy family, find friends. Sites like Letterboxd allow one to interact with others who like the same film.
And then of course there’s the infamous long-tail, with your product remaining on the digital shelf for all eternity as finding the infrequent buyer looking for content within that specific niche. Anderson brings the example of Into Thin Air supporting the sales of Touching the Void, because both have similar characteristic and appeal to the customers of the niche (Anderson, 2004). If the customer find one, he is likely to look at the other as well, as recommendation engines cluster similar product together. There more people buy both products, the stronger the indication to the automated algorithm, that this is a good match. Recommendations and people’s actions turned into a demand-creating feedback loop (Anderson, 2004).
Buzz. Referenences add up. If you’re indundated with mentions of the same film across channels, from friends, the new you read, etc, you finally give up.
Everybody buys the movie new. No market for old copies.
Filmmakers get a larger share.
Content discovery through virality.
The Audiences in the networks can be highly targeted.
We no longer need to find local audiences (Anderson, 2004).
“Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching” (Anderson, 2004).
Finding niche audiences. If you can target very specific people with content that is highly relevant for them, perhaps they pay for it? Niche audiences coupled with the long tail. Finding a niche audience for you content that is willing to pay.
Turning social networks contacts into buyers. Conversion funnels
Social commerce is global by default. Because of the ease or reproduction, a piece of content can find an audience that has no geographical connection but share something in ideas.
As filmmakers learn more about human psychology and strategy, concepts such as the Facebook Affinity score are helpful in targeting an audience.
Direct sales to the consumers.
Private sales that create a sense of exclusivity.
Recommendations
The value of a recommendation is based on its relevance to the person; it needs to correspond to the interests and tastes of the consumer; it needs to be backed up by social proof; it needs to come at the right time; and it needs to be at an attractive price. Getting all these details right is what makes a sale happen. From the point of view of the sellers, all these details need to be right for millions of people that each receive a personal experience; in other words, the system needs to scalable – meaning it needs to be built on machines and algorithms interpreting data from the social graph and figuring out a response to the customer. Direct to customer sales strategy.
Mobile phones.
Challenges
Disintermediation
Disintermediation enable content-producers sell directly to audience but then how do you get large marketing budgets? Opportunity to be a digital-only producer and distributor, cutting out the middlemen, and selling content directly to an audience. Schumpeter’s ideas of creative destruction in increased global competition.
Decision Fatigue
People like to make decisions but they like to be guided. Not unlike the famous x cartoon with the boss. While the global nature of social commerce is an opportunity for digital audiovisual goods that don’t need transportation, it is also a challenge. Finding a niche is time-consuming. The web is characterized by content overload.
X argues that social network markets are inherently global. Through licensing restrictions from one hand cut of markets. On the other hand, targeting markets with export content that are cut of is an opportunity. Estonian creating content for the Balcan countries. Could this work?
Knowledge Transfer
There’s a requirement to know it all. Startup filmmakers need to be well-versed in business models, digital distribution, marketing, psychology, and many other areas, which leaves less time to focus on the actual writing, shooting a audiovisual piece. As related to digital workers in the X, less business-savvy digital workers make trade-offs in the lifestyles, not affording a family, not having time. A lot of this information comes from websites and digital books, conversations with other filmmakers around the world, tweets, chats, and etcetera. University is not the center of knowledge but the facilitator and there’s no benefit to going to film school. Wikinomics and Prosumtion, user-innovation, and taking the best ideas from users, encourage and reward them to be more engaged with your product, create communities, and feel a part of something. Tribes.
Gill highlights there are concerns with people not having sufficient income to raise a family (Gill, 2007). Cultural Differences. Globalization standardizes culture through multinational corporations. At the same time empirical evidence shows cultural identities rise against and reinforcing their identity against the Hollywood movies, etc.
Copyright.
Lessig worries we are moving towards a feudal system of copyright. “
Conclusions
What are the opportunities and challenges in the networks for filmmakers? How can filmmakers monetize their work? There is a market for audiovisual content. There are people who are participatory but consumer innovation is endangered by decision fatigue from too many options. Zynga’s players play virtual goods that offer emotion value. A movie is not that different; it is an emotional, experiential good. Requirement to understand of human psychology to drive sales. As stated in the title, the social network markets are in evolution. As businesses themselves, these platforms are in the business of finding new ways to connect people between themselves and people with businesses. Changes and improvements (and occasional problems) are expected and made use of.

