- The rapid expansion of streaming video models has brought together Hollywood’s creativity with Silicon Valley’s technical savvy.
- A strong focus on good content, creativity and storytelling will be the driving force behind the success of tech-media collaboration.
- Concerns around data, privacy, and revenue generation through the new platforms are complicated and real, and need to be addressed.
The compelling power of a good story — told well — is timeless. But the way it is told, particularly through the medium of video, is rapidly evolving.
Media companies have begun moving many films, television shows, and advertising campaigns online, compelling Hollywood and Silicon Valley to become far more intertwined and interdependent. Today, the scale of investments, partnerships and deals across these creative centres grows ever larger, yet critical questions remain unanswered. So, where’s the common ground that will enable both industries to move forward together?
To kick off this much-needed conversation, Variety and PwC earlier this year brought together senior executives from the technology, media and telecommunications industries to share their insights. Here are the top highlights from our first Silicon Valleywood event earlier this year:
Content plus connection
is the new business model
With the rapid expansion of streaming video models — new streaming services have launched or been announced since this conference — there’s no longer an either/or choice between Hollywood’s creativity and Silicon Valley’s technical savvy. High-dollar, high-quality content (both original and licensed) must be targeted at the right consumers at the right time with the right content. That requires taking the following steps:
- Be pragmatic about content investments and develop an in-depth understanding of the audience.
- Since viewers rely more on recommendations than on ads to discover new shows, create a content experience that’s energising enough to drive referrals.
- Leverage social platforms that use premium videos to generate conversations and drive more connections.
The art and science
of the story
Compelling stories and great content won’t come from highly adept algorithms, but from creative people using new technology in imaginative ways. The real power of technology has been in its ability to democratise creativity. Several executives at the Variety event spoke of fostering human-tech synergy — in both their internal operations and their external outreach. Here are a few examples from the “Art & Science of Storytelling for the Inundated Audience” panel:
- The panelist for Adobe said it routinely incorporates creative talent into its project teams. And that it also donates tools to afterschool programs, helping students learn how to combine storytelling with tech skills.
- Facebook’s panelist said its culture encourages storytelling. This is evident in both its hiring practices and the storytelling tools it shares with consumers.1
- Both Snapchat and YouTube have built dedicated studios where content creators can experiment with augmented reality (AR), artificial intelligence (AI), and machine learning.2 3
Creatives and data
are coming together
Media companies routinely include data at the forefront of marketing and distribution decisions, but data also plays an increasingly important feedback role in the creative process. Data analytics can affect how characters and storylines develop and enhance the business case for greenlighting new projects. The real challenge for Hollywood firms is to expand their access to Silicon Valley talent and to the tools that extract insights from the mounting troves of data media companies must manage.
- Several panelists from larger media conglomerates confirmed that they are upskilling their workers, while also acquiring strong analytics skills through new hires, deals, and partnerships.
- The key is not about being physically situated in a specific location. It’s about pulling together the data that’s flowing through all your locations: New York, Hollywood, Silicon Valley, etc.
- Survival in media now depends on becoming a technology company, which includes getting smart about data analytics. For some firms, that requires getting really smart about tech, really fast.
the new reality
A number of Variety panelists mentioned growing concerns about privacy, misinformation, and data breaches, and there was strong support for a more unified, collaborative, and proactive industry approach to solving these concerns. The solutions included these points:
- Online activity requires a willingness to engage — and also to relinquish some rights — in order to share content. It’s about striking the right balance.
- Even as the industry responds to growing security and privacy concerns, we shouldn’t lose sight of how much good is being created by connecting people and sharing content through technology.
- Tech and media companies can learn from telecom’s history with regulators: You need to have both patience and persistence.
but doesn’t disappear
The economics of premium video are thorny. There’s no way to determine how many services consumers will want to sign up for long term, which makes calculating growth investments tricky for companies that are new to the world of streaming content. The future of advertising may not look like today’s media buying world, but, according to the Variety panelists, the ad model itself will still be around a decade from now.
- Despite the robust efficiencies of digital ads placed in other venues (search, social media, online marketplaces, etc.), premium video is different in terms of advertiser and consumer expectations.
- Advertisers are still not satisfied with the metrics tied to ads on premium video content because they can’t determine how effective their ad purchases have been and what the payoff is.
- Consumers, in turn, have little patience with — and high expectations for — ads that interfere with the video content they have paid to view. They are more likely to complain about ads that interfere with their video viewing experience than those that interfere with web browsing experiences.
- After the consolidation of a number of online ‘ad tech’ firms — and some notable collapses4 5 — both tech and media executives have called for better collaboration between content and platform companies.
- Ultimately, marketers need to identify the appropriate metrics and match the right kind of ad buy to their campaigns: linear, addressable or digital. They must determine the goals of their campaigns and choose the right key performance indicators to measure. Marketers also need to identify the channels that are most appropriate for reaching the audience that will ultimately result in them taking the desired actions.
KPIs and metrics might have been the biggest economic issue at the Variety event — and with good reason. PwC analysis found that digital advertising in the US reached US$130 billion in 2018 — just under 50 percent of total advertising. In 2019, digital ads are slated to reach US$144 billion.
As media companies race to create and distribute platform-based content, they’ll need to embrace today’s blended-family environment. Cross-pollination between Silicon Valley and Hollywood will be vital for survival in the world of ‘Silicon Valleywood.’ So, stay tuned for more — streaming on a platform near you.