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Is there Gold in the Trash? Lessons from the Film Industry

- March 30, 2011 - 1 Comment

Recently at the Consumer Electronics Show I had a enlightening conversation with the head of a major movie studio.  He told me that they spend close to $1 billion annually to “acquire the same customer over and over–people that go to movies.”  That’s because the natural goal with each movie is to maximize box office revenue.  Since web properties deliver little incremental revenue today, all their effort is placed on the traditional revenue streams.

They create web properties and social engagement platforms primarily for promotional purposes that live for about four to six weeks after the in-theater window.  Then, they are abandoned and they start over on the next film.  With the cost of the average Hollywood movie promotional website running about $1-3 million, the studios lose an opportunity to understand, engage and monetize that audience.

The lack of recognition on digital opportunities goes even deeper.  At the Digital Media Wire/Variety Future of Film Conference, a tech startup that does social widgets for film sites said they loved coming to Hollywood because it was “like printing money–every film studio wants to ‘do social.’”  They said they were surprised at the end of each engagement because they’d try to transfer the audience data they collected via the widget back to the studio, and they’d be told to keep it; that the use of that data wasn’t the studio’s “job” and that they wouldn’t know what to do with it anyway.  The startup said it was fascinating to watch studio CFOs scrutinize the ROI on every campaign as measured by impressions, click through rates, etc, but then walk away from the most valuable assets–the data and the relationship with the consumer–that the social app was generating.

Movie studios perhaps are optimizing around revenue today (box office) but not yet optimizing around the revenue and asset of tomorrow.   That asset is data.  By having a source of data about their audience that can do useful things, studios can both decrease marketing costs and develop new revenue sources around that audience and film property.

While Cisco Eos can help studios accomplish short term promotional goals via a socially enabled entertainment experience, the real added value is over the long term.  That value is realized in three ways:

1.       By simplifying the development and deployment of a social entertainment site, Cisco Eos helps media companies lower their initial costs for each movie site. (No more need to hand build multi-million dollar web experiences)

2.       Cisco Eos enables the movie studios to view their brands and content assets as a cohesive portfolio rather than individual silos or points in time. Taking an integrated, centralized approach enables them to: aggregates data, see how audiences interact across properties, and cross pollinate content across properties to migrate audience across brands.

3.       Ultimately, having one, big data pool from which to gather and evaluate your audience allows media companies to leverage relationships or interests from one campaign and apply it to the next. This enables movie companies to quickly lower marketing costs, increase fan engagement and promotional reach, and potentially up-sell audiences on new content experiences.

Just by having everything in one place, studios can turn what was viewed as an expense into gold.


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  1. Thanks for the post Dan. You point out a fascinating flaw in the distribution of modern films. Check out what Big Air Studios is doing to understand and engage tech savvy audiences here: Big Air’s platform utilizes the latest web distribution outlets to launch award winning independent films that wouldn’t otherwise have access to the public via traditional studios. Started by seasoned film executives, Big Air has partnered with Cisco to take advantage of exactly the niche that you’re talking about. It will be fascinating to see what happens in this space going forward.