In this excerpt, Levin elaborates on the implications his company’s multi-screen business model poses for creative talent, television networks, and the future of distribution.
See Also: Levin discusses generation gaps and television programming.
Monday, May 23, 2011
MIP: You said you setup your company with a horizontal view of the business. Can you explain?
LEVIN: It simply means that we started the company over six years ago with the belief that consumers consume “across screen” and they have very little loyalty towards any one screen. So if content lives across screen, you need to set yourself up first and foremost as a content company that meets the cross-screen needs and desires of consumers, advertisers, and content creators.
We also recognized that each screen offers its own varying degrees of interactivity, and that the storytelling experience ideally should adapt to some unique components of each of those screens. At the same time, we looked back at a lot of different structures within the media business and felt like there were still certain benefits to vertical integration. So we set up our company with some of those benefits.
Our company has three strong divisions, like three legs of a stool. There is a studio division that develops and produces content. All the production occurs in-house. I think the term “studio” gets used pretty loosely these days; we actually make content. And again, we make it across multiple screens. The talent management piece involves about nine managers and over 150 clients. The clients generally are “multi-hyphenates” in that they wear more than one hat. They are writer-producers, writer-directors, etc. There has been an emphasis lately on managing talent that we call “lifestyle personalities,” essentially people who can build a larger brand around themselves, such as design experts, chefs, fitness personalities, reality stars, and things of that sort. We use digital pretty actively in that realm to both discover and develop talent that has real value, talent that has an authentic and credible relationship with an audience. We then work hard to develop their suite of social media tools so they can grow what is essentially a micro channel around themselves and communicate with their followers.
Ultimately we believe that there is going to be value in transacting that relationship in appropriate ways with brands. So we have a branded content division that has five people dedicated to it. We have a head of sales in New York who interfaces with consumer brands and the various constituencies that represent them in the marketing world, whether it’s creative agencies, media buying agencies, PR agencies, or the internal marketing agencies with their own direct relationships. We execute on branded content initiatives for them, and those branded content initiatives can come through any of those channels as well as any distributors who work with those brands. Our general marketplace position is that we don’t go to the brands with properties in hand looking for financing and funding in order to leverage greater ownership in various other mediums. Instead, we work to establish a relationship with those brands. We help them achieve their marketing objectives through longer form content initiatives, so we really don’t end up stepping on anyone’s toes, and we can work with all the various partners. At some point they need someone who can execute; ideally, our value proposition is that we can be an end-to-end solution, operating soup to nuts – everything from coming up with ideas, developing someone else’s ideas, executing on an idea, plus anything in between. We are a one-stop shop. Usually these big ideas live across multiple platforms – TV, digital, live events, in-store retail, publishing – and we can project manage across all of those various distribution platforms.
This is a model didn’t exist in the past. I mean, there were choices. You could go to three or four networks with a pitch, but now you can sit down with a creator and say, “Look, there are a lot of choices out there.”
The choices generally speak to three distinct levers. One: How much money do you want to make? Two: Do you want that money up front or do you want to bet on yourself and see more money down the road? And three: How much creative control do you want and how much speed to market do you want? Those three buckets define a strategy for each client. If you want more money up front and want to get to market more quickly, then you are going to pursue the more traditional path. If creative control is more important to you and you are not as worried about getting out to market in a big way quickly, you can try to incubate your content on some of the smaller platforms. It’s really the same methodology that talent and talent managers are going to increasingly have to go through. If you are a comic, it’s no longer about how do you get called over to Johnny Carson’s couch; you can get out there in so many other ways now. It’s just a question of what comes first, what path you want to take.
What are some of the challenges you face in today’s media marketplace
We talk a lot about the traditional barriers of entry that used to exist for film studios around production, sales, marketing, and distribution. And when you look historically at the studios, obviously the infrastructure that surrounds us in L.A. is a testament to how high the barriers of production have been: You needed a back lot and sound stages. For distribution, you needed a sales team around the U.S. and the world to carry prints of the film to each theater and then to go get the box office receipts and make sure you weren’t getting ripped off.
The sales group to varying degrees in both network TV and film had a very hands‑on capacity but marketing was always the lowest barrier of sorts because in a world of three television networks, you didn’t have to do that much advertising. Generally people’s behavior was to either look in TV Guide or switch between channels, to channel 4 or 5 or 7 or whatever. Now the cost of production and distribution has fallen. A phone can provide that function. Sales is still a relatively high barrier when it comes to a brand relationship because it still is a one-to-one relationship. As much as Google has a large piece of the sales marketplace, it’s an automated marketplace. It’s essentially a commodities exchange based on keywords. As they have tried to migrate into the more traditional media business, they have had a very difficult time because they can’t understand how to position the value for traditional brand media buyers, and they don’t have those personal relationships. To me, marketing becomes one of the highest barriers of entry: how do you get noticed?
I think social media has been such a game-changer because of that one piece. You can no longer speak from up high and shout down to people that this comedy is the newest hit or this movie is fantastic, thereby buying yourself an opening weekend. Now people can go to different sources to determine whether or not to see something. Twitter and all the various immediate social tools and applications necessitates that, as a marketer, your traditional results with your traditional marketing dollar are becoming less and less effective. You have to somehow be able to manage a community of influencers to a greater and greater degree and accept the fact that those influencers are going to have word of mouth that becomes accelerated and amplified very quickly.
Do you see talent reacting differently to the online space or do you see them sharing your vision of its importance?
We generally sign people who embrace the idea that online offers them a chance to distribute what they do and sort of be who they are relatively unfiltered, as compared to working with a third party like a television network or studio. We strongly encourage them to take advantage of social media to communicate, interact with, and grow a consumer base. I don’t know if everyone believes that their micro channel is a channel that ultimately will be able to be leveraged through brand relationships – the lifestyle personalities get that to a greater degree than the comics do – but we try and stress to them that authenticity and credibility is really important. They are all pretty active but a lot of them are very young so they would be anyhow. That’s their world.
And the networks?
We are starting to see that networks are creating more and more ancillary content and a lot of times it’s underwritten by a sponsor. They don’t usually turn to a traditional production company to do that but they do turn to a creative team to do that. So we are starting to look at that as a growing production business. Sometimes the work we do with creative agencies is a little bit more than production services work. We may be involved in casting or identifying the director, but the creative vision as a whole may be more formed than when we work with media buying agencies, for example.
Are you optimistic about the future of distribution?
It’s obviously a transformative time. I think it’s more transformative than the shift from radio to TV because while that was a different medium, the models pretty much stayed the same. I think social media upends that model, and the fact that consumers have much greater control, the fact that there is relatively unlimited shelf space, the cost basis gets lowered. But I still think scale is going to matter. As long as scale matters, I think you are going to find there is going to be a fixed number of distribution companies, if you will, that have an undue amount of influence and drive the whole ecosystem.
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