• VidCon 2011: YouTube Faithful Scream and Dream of Hitting it Big

(A slightly different version of this post appeared on IndieWIRE).

With 2,400 young and noisy YouTube fanatics, the sell-out crowd could have been mistaken for a rave. However, VidCon 2011 was something even more radical: It's a next-gen vaudeville show that wants to become a showcase for the future of entertainment.  

Headquartered at Los Angeles' Hyatt Regency Century City, the three-day, second-annual VidCon was a showcase for the fastest growing segment of the entertainment business: Online video and most specifically YouTube, which was -- lest we forget -- founded a mere six years ago (and owned by Google since 2006). 

By now, YouTube is so ubiquitous it's easy to take for granted. The site's videos garner 3 billion views per day. More than 48 hours of video are uploaded onto YouTube every minute, a rate that has doubled in just one year.   

And from all of that emerges VidCon, which features the elite stars of the YT universe from among the site's 20,000 partners. According to YT exec Tom Pickett, hundreds of YouTubers make six-figure incomes from their share of ad revenue that comes to channels that attract millions of subscribers and viewers, and thousands more earn at least $1,000 per month, a figure which has tripled in the last year. 

VidCon was founded by siblings Hank and John Green, who have one of those star channels in the @Vlogbrothers. As emcees, they welcomed one home-grown YT star after another in 15-minute stints, including Dane Boedigheimer (the Amazing Orange), Phil DeFranco, iJustine, Mystery Guitar Man,  Shane Dawson  and Michael Buckley.

Naturally, each brought their own cameras on stage so they could post videos of the event, like this one from Toby Turner (Tobuscus), who is known for his faux trailers. 

At one point, when the stage was filled with YT celebs dancing to the rock stylings of TeraBrite, the audience's shriek became a deafeningly high pitch rarely hard outside Justin Bieber concerts. By my reckoning, the average age of VidCon attendees was mid-20s, with a decided tilt towards the teen cohort.

That frenzy is more than than fandom: Most audience members are YT creators who aspire to the same kind of fame and fortune. Top draws at VidCon included sessions like "Secret Tactics to Grow Subscribers and Views," "Building a Great Rig," "Merchandising Your Brand," and my personal favorite: "Balancing School and YouTube." 

YouTubers may be young, but they have a sense of their own history. VidCon presented a reunion of the actors from Lonely Girl 15, the fake videoblog that helped put YouTube on the map in 2006, especially after it was outed as fiction, not IRL/In Real Life. Many YTers, including DeFranco and the Greens, said they date their YT awakening to LG15, which was also one of the first web properties to utilize UGC in the form of viewer-contributed videos.

VidCon is not an official YT event, but the company was a major sponsor and a ubiquitous presence. Just as Apple once used MacWorld to introduce products and make announcements, YT took the stage to rally the troops and to define its message, including the launch of a new partner hub that centralizes resources and links.  

YT execs also promoted the site's new interface, dubbed Cosmic Panda, which began its rollout in early July. The effort is a long-overdue revamping of YouTube's cluttered look and feel, especially compared to sleek sites like Hulu. 

But as successful YouTube producer Bob Jennings suggests, Panda's focus on channelization reflects YouTube's hunger for slicker content and the advertisers that they hope will follow. YT's billions of daily views don't translate to a similar appetite from top-tier advertisers. Vevo, the music site spinoff that YT launched with Universal Music, was one way that YT addressed this problem. Not surprisingly, with music videos consistently making YouTube's top-viewed list, Vevo is a hit.

YouTube already bestows privileged placement and exceptional promotion on its biggest UGC stars; it's not much of a stretch to imagine a premium YT that will place them alongside the heavyweights of professional content, which YouTube has been wooing for years with mixed results.

However, that narrative was not part of VidCon, not even during the "industry day" that preceded the main show. 

Vidcon's message is one of hope, with presentations like the one from Canadian YTer Corey Vidal, who shared his own triumph over homelessness: Every person who opens a YouTube account has a shot at starring in his own rags-to-riches meme -- this generation's version of "A Star is Born." 

Which is why next year, VidCon will move to Anaheim Stadium, which has enough room for 12,000 stars. 

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The official Vidcon channel posted some of the conference live, as well as interviews with many of the speakers here. Read backwards on the #Vidcon Twitter search for a flavor of the event. 

• Will Data Save the Studios in the Era of Social Media?

A version of this column was published on Tribeca's "Future of Film" blog on Monday, May 23, 2011, syndicated on Huffington Post and New Medici network, and cited on The Wrap and Combridges. A lively Twitter conversation has erupted as well. Please RT and let me know your thoughts via comments below.

Warner’s acquisition of Flixster is Hollywood’s savviest move yet to survive a wrenching transition into the age of social media.

It’s not just that Flixster is the leading social movie site on the iOS, Android and Blackberry mobile platforms with 35 million downloads to date – or that its sister site, review aggregator Rotten Tomatoes, attracts 12 million monthly visitors ­– or that Flixster powers Facebook’s Movies app, also the market leader.

No, this is about more than traffic and traction. It is about data. Data is the secret sauce of social media that will empower Hollywood to take control of its own business, rather than to cede it to intermediaries, e.g., the disruptors from Silicon Valley.

With this deal, Warner gains direct access to millions of movie fans, and to the data generated by their social interactions around movies – both essential ingredients to build a direct-to-consumer movie business owned and operated by Hollywood.

All this, at less than the cost of a single comic-book movie!

Social media fosters a flood of consumer interaction and generates massive streams of data, enriching companies that collect the data, and penalizing those who don’t.

This is a very different model than Hollywood (or anyone else) has ever known. It’s worth billions, because data can be tracked, measured, mined, parsed and monetized in countless inventive ways. All of which are counter to Hollywood’s old model. To wit:

• I can get it for you wholesale. Studios have been wholesalers who sell to retailers, not end-users, e.g., individual humans. Hollywood’s biggest customers have been theatre chains, TV and cable networks, and big-box stores –– and now digital distributors like Netflix, iTunes, and Amazon. All of which have been very busy building a consumer ecosystem powered by data.
• E-commerce. To reach customers directly, studios will have to build new businesses to distribute movies and leverage behavioral data. Which means, Hollywood must compete with the best-in-class e-retailers like Amazon and Apple. Are they up to this daunting task? Studios have tried before, and failed (WB’s Entertaindom and NewsCorp’s MySpace debacle come to mind.) 
• Coopetition, Front #1. To succeed studios must compete with old bricks-and-mortar customers and new digital customers. Jousts with Apple, fights with theatre owners, tiffs with Netflix. These are but a few of the business challenges facing the studios during this time of change. There will be more.
• Coopetition, Front #2. To succeed, studios must cooperate in order to meet customer expectations in the retail marketplace. But fierce competition between the studios has doomed many joint efforts in the past, not to mention the cold hand of anti-trust regulation. Can current cooperative initiatives such as MovieLabs, (http://www.movielabs.com/index.html, Hulu, (http://www.hulu.com/) and Ultraviolet, (http://uvvu.com/) break the jinx?
• Opening-itis. Every weekend the studios reinvent the wheel. Expensively, with few economies of scale. Social media builds affinities over time, as user behavior a tapestry of future interests. Studios must learn how to cultivate an ongoing conversation with individual fans, and not only with sequels and “franchise movies.”

Why It Took So Long

Historically, each new wave of disruptive technology triggers a fairly predictable plot in Hollywood: Denial. Resistance. Acceptance. Embrace. Survival.

 And so, while companies like Google, Apple, Amazon, Netflix and Facebook built online ecosystems for movie fans – virtual empires of data – the studios acted out what Scott Kirsner has called: “Hollywood's epic battle between innovation and the status quo.”

“Studios cannot disrupt their own business models,” says Gordon Paddison, CEO of marketing firm Stradella Road and a former bigwig at New Line Cinema during the LORD OF THE RINGS era. “Somebody else will do the disruption,” says Paddison. “If we're smart, we learn from it.” His research has documented changes in movie going habits as a result of social media.

By now, studios aggressively market most releases with at least a website, a Facebook Page, and an online trailer via Apple and YouTube. They build ad campaigns on the web and mobile platforms. They experiment with coupons (e.g., Lincoln Lawyer), group ticketing (Toy Story 3), and direct streaming on Facebook (Dark Knight, etc.). They harness Twitter to jump start buzz generated by fans. They build mobile apps, games and ARG’s, or web-video to excite movie fans.

“Social media has changed everything we are doing very dramatically,” said Doug Neil, SVP for Digital Marketing at Universal Pictures. “We have a one-on-one connection with members of the audience. Social media is a great way to activate word-of-mouth and pass-along buzz for our films.”

Indeed, no less an authority than Mashable, the blog that covers all things social, declared, “the movie industry has embraced social media. Big time!” citing Toy Story 3, Inception, and Paranormal Activity. Big social-media initiatives for the Oscars and Golden Globes in 2011 suggest that social media has arrived.

Notwithstanding Hollywood’s newfound embrace of social media, the shift to a direct customer and data-focused business presents a huge challenge.

“Social media for the studios is still very much campaign-focused, and it's very predictable,” said Nick Mendoza, Director of Digital Communications at Zeno Group, a PR agency. ”Emphasis is on the opening weekend…Then there's a break until the home video window, when you see an upsurge to promote BluRay and DVD sales…studios treat social platforms as impression-based.”

"Movie studios are optimizing around revenue today (box office), but not yet optimizing around the revenue and asset of tomorrow. That asset is data," wrote Dan Scheinman, former SVP for Cisco's Media Solutions Group in a blog post written before the Flixster deal (and before Cisco shut down his group).

Scheinman told me that “studios must use data to create an audience for more content -- not just tickets this weekend, but all kinds of products. They need to cultivate direct relationships with customers, and bring those customers back to their own sites."

“When it comes to social media, studios don't stand out. They aren’t as aggressive as startups,” said David Wertheimer, head of the Entertainment Technology Center at the University of Southern California and a former Paramount exec, noting that “studios have been more aggressive on the technological front when it adds value to their existing product, for instance production technologies.”

“It is very rare for any company with a successful model in the present to dump it for a bigger success in the future,” says Blair Westlake, corporate VP of Microsoft’s Media & Entertainment Group, and a former executive at Universal. "The studio dilemma is this,” says Westlake. “Do they get enough value in the future to give up what they have now?”

 In other words, have they reached the tipping point when the status quo presents a bigger risk than betting on an uncertain future in a new business?

"This industry needs a game-changer,” wrote showbiz journalist Sharon Waxman a few months back. “No major media company has figured out how to embrace this revolution. None has integrated that change into its core – or seen its core identity melded to the next." 

Next moves

Is the Flixster deal that game-changer? Will other studios advance Hollywood’s data strategy? Food for thought:

• Comcast owns Fandango (which in turn bought Movies.com from Disney). Sony owns Gracenote, which powers iTunes – how could studios leverage these assets?
• Should a studio will buy a movie data firm like Baseline Studio Systems from the New York Times or IMDB from Amazon.
• Or how about a feisty start-up like Jinni, which has developed a personalized “genome” for movies, similar to Pandora for music. Or start-up RCDB, which is building a database of content from within movies.
• Or market leader Rovi, which rents its vast database to power both conventional and web movie services. 

 What do you think? What are your suggestions?

Update on Monday, June 13, 2011 at 11:13 AM by Nick DeMartino

My recent post about studios and data has become part of a lively online dialog on the topic. Not only are there a LOT of comments on the original Tribeca site, but my thesis and those of my interviewees have been cited by Sharon Waxman, editor of The Wrap, Simon Staffans on the MIP blog site, by Simon Pulman on his Transmythology blog and Jon Leland on his Combridges site. Wonder if there are others I've missed?